Insurance - Vehicle: what is your risk profile?

Pumpkin_rrr on 26/02/2015 - 16:26

Hope this is in the right Forum.

When I was young and not-able, I couldnt afford to pay expensive premium on Comprehensive Insurance. So I only insured for Third Party Property. My thought was: so long as I remain a careful driver (which I have been for 20 years now),I'd cover for damage to someone else's car or property if I am at fault, plus my own if caused by others. It was a risk I take, a calculated risk no doubt. And God bless me, I survived those period.

For some years now I have had Comprehensive Insurance. But recently made redundant, I am reviewing my financial commitments and really doubt whether this is money well spent.

Your thoughts please.

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Comments

  • ozhunter on 26/02/2015 - 16:45

    My thought was: so long as I remain a careful driver (which I have been for 20 years now),I'd cover for damage to someone else's car or property if I am at fault, plus my own if caused by others. It was a risk I take, a calculated risk no doubt. And God bless me, I survived those period.

    Isn't that what everyone thinks? How much is your car worth?

    really doubt whether this is money well spent.

    You could say that about any insurance. IF something happened, could you manage without receiving a payout for your car?

    • digitalterrorist on 26/02/2015 - 16:55
      +2

      Take the best of both worlds and jack up the excess to maximum. For bingles, if it's less that the excess and you were at fault, you can pay for it out of your pocket. In the event of a total write off, you will still be covered (just a small hit).
      I've jacked mine to to $2,000 excess and that shaves off around $750 per year in the premium. Even if i have an at fault bingle every 3 years, I still break even (roughly). Not that I plan on having any mishaps. I've not had any at fault events in nearly 2 decades.

  • spersephone on 26/02/2015 - 16:48
    +1

    If you've already held it for a while, surely the cost is not too much now that you've proven yourself? If anything was to happen, at least you cover yourself for your own out of pocket expenses in purchasing another vehicle or fixing it. The worst time to hold Comprehensive insurance is for the first few years, while the premiums are at their highest.

  • mskeggs on 26/02/2015 - 18:23
    +2

    If you are squeezing the dollars, you probably can't afford the hit if you did write off your car.
    Possibly up the excess, but after a point it doesn't make a huge difference (I dropped mine from $1500 down to $700 last renewal for only a $20 p.a. premium increase).

    Good luck with the job hunt, and enjoy some saving s by doing things your normally don't have time for (cooking from scratch, gardening, DIY, etc.).

    • Pumpkin_rrr on 28/02/2015 - 09:59

      Good advice. Will try my best to enjoy this 'special' period of my life :-)

  • modsec802 on 26/02/2015 - 22:11
    +1

    Even if you're a very careful driver, things happen outside your control.

    Like the hail damage that massively damaged our cars late last year in Brisbane.

    Lucky we have reasonable excesses because both our cars were damaged and we've be up for a lot of money otherwise.

    • Pumpkin_rrr on 28/02/2015 - 10:01

      Oh yes, I was 2 minutes from exiting the carpark but luckilly missed the hail.
      On the way home (after 2 hours) I saw so many cars stopped on the freeway with broken windscreen.
      Not a pretty sight and I thank God that I had been spared.
      Not too worried about windscreen which is easier to fix, more worried about the dent to the body.

  • Cheeper on 26/02/2015 - 22:34
    +1

    How old or valuable is the car? There does come a time when most cars are not worth having comp insurance for. Usually around the 10 yr mark.
    How often or how far do you drive? Is it mostly city driving?
    Is it a car that would be attractive to a thief or one that no one would touch even though it had the windows down and the keys in it?
    Is it parked on the street 24/7 or securely garaged.
    All these things you know now… review your situation and make a decision.
    I have been driving for just on 50 yrs now and never made a claim… all that money down the drain DOH!!
    With my previous car, an 07 model I only had TPP insurance as I only make short local trips most of the time and it was garaged when not in use. I now have a new car and while I still have the same usage pattern I took out comp insurance and will do for a few years as it is a reasonably expensive car.

    • modsec802 on 26/02/2015 - 23:05

      Money wasn't down the drain: you bought peace of mind

      • Cheeper on 27/02/2015 - 12:46

        I don't have peace of mind now LOLLL… I'm still adding up all those premiums I paid!! :-(

    • Pumpkin_rrr on 28/02/2015 - 10:03

      50 years! That's remarkable. Welldone!
      Down the track I should convince hubby and son that we dont need three cars in one house. I shall sell mine and the two of them can chauffeur me around :-)

  • affable on 27/02/2015 - 08:22
    +1

    If you are part of a large family, instead of Comprehensive, consider 3rd party only and set up "self insurance" (like some companies do). Just make sure you write it all down so family members know what the rules are. A good way is for each family member to contribute their old premium into a "pool" until the write off value of the most expensive vehicle is reached. After that, you don't need to contribute any more premiums until a claim is made. By using existing commercial premiums you take into account all the risk variables that the insurance companies use to price risk. Just make sure you don't have a multi-car bingle at a family reunion, LOL.
    I remember about 15yrs ago coding for an insurance company "If Cylinders >= 8 and Age<25 Then Insurance Declined"!

    • Cheeper on 27/02/2015 - 12:41

      It may be an idea to have the write off value of your car in the kitty before starting your idea?

      • affable on 27/02/2015 - 13:46
        +1

        Say 10 family members agree to "self insure" and the price of the most expensive car is $30k.
        Premiums are an average of $600 for comprehensive, and $200 for 3rd party. So that leaves an average of $400/yr x 10 =$4k in "premiums" for the kitty. If the most expensive car is a total writeoff in an at-fault accident its still likely to be worth $5k salvage value. So $25k-30k needs to be available in the kitty. If this worst case accident occurs in the first year of "self insurance", each family member will have to chip in an average of $2100-2600 (as you have collected only $4k in "premiums" so far). Still no big deal.
        Or you could collect the $30k upfront @ approx $3k per person and not pay any future premiums until a claim is made. $30k sitting on one of the family member's home loans in an offset or redraw acct is still worth $1500/year even at current low borrowing rates.
        My extended family were doing the same with NRMA roadside assist for quite a few years. Much cheaper for everyone to chip in $30 if they need to join up on the spot.

  • parson on 27/02/2015 - 10:30
    +1

    An ex panelbeater Ive been with NRMA and now RACT FOR 35 years. Don't overlook the the seriousness of even a small accident it could cost you a small fortune for a new plastic bumper bar and paint I'd play it save and get comprehesive Ins.I now have a lifetime nil no claim bonus and have never had an accident in 50 years

    • mskeggs on 27/02/2015 - 18:45

      Why would you pay a fortune for such minor damage unless you had an expensive, new car?
      My old heap has dings and scratches all over it.

    • Pumpkin_rrr on 28/02/2015 - 10:05

      Welldone, another one with 50 years good record.

  • Cheeper on 27/02/2015 - 12:45
    +1

    but say it was a 10 y/o holden or camry and you dingled the bumper…
    option 1. go to a wrecker and get another one and a can of paint from sca
    option 2. have comp insur, pay the premium, pay the excess, pay the increased premium the next year because you made a claim.

    It comes down to the value of the car… why would you pay $600 - $800 premium with say a $800 excess on a car with a wholesale value of $5000? There comes a time when it is just not worth doing comp.

  • 4ransm on 27/02/2015 - 15:43

    Have you tried cheaper options like Bingle, Coles insurance? They may not have good customer service but they may give you piece of mind too that you're secured. Just an option!

    • Pumpkin_rrr on 28/02/2015 - 10:07

      Thanks for the suggestion. I am just a bit overwhelmed with quotes after doing five or six big companies now.

  • Pumpkin_rrr on 28/02/2015 - 09:57

    Thank you all for your valuable input. My car worth about $18k, very low mileage, hardly used. But I cant afford any loss so I guess the best bet for me is to maximise the excess.

  • photonbuddy on 28/02/2015 - 11:50
    +1

    The other option is to look for a company that offers a free pay by the month option.

    For an 18K car, I think it's well worth getting comprehensive.

    You could also fiddle around with the agreed value to minimise the cost. I never go market value, as they'll only try to screw you over.

    My rule for getting comprehensive on a car is if the policy costs more than 10% of the cars value, it's probably not really worth it.

  • Cheeper on 28/02/2015 - 14:30

    Pumpkin… have you tried a quote from this one..
    http://www.progressiveonline.com.au/
    If it is just insurance you want without the bs and the stuffing around of the supermarket ones then this is the go. They have a good reputation. Only means of communication is via email but that is fine as then it is all in writing and they are fast to respond.

  • [Deactivated] on 02/03/2015 - 00:06

    Risk profile is the correct approach. How much is your vehicle worth etc. You might like to look at 3PP which includes fire and theft as a "freebie" extra - eg "WW" aka Hollards.

    Just saw your comment above. $18K ought to be worth insuring comprehensively but as you do very low kms try one of the insurers who provide lower premiums based on usage.

    • Pumpkin_rrr on 02/03/2015 - 09:13

      Hi Possum, can you tell me which insurers has policies based on usage? Thanks.

      • [Deactivated] on 02/03/2015 - 11:10

        Many insurers have a limited km option Pumpkin. One of them, can't remember which (Youi?), advertises on TV. Suncorp, Woolworths, CGU (doesn't get good reviews from some), Realinsurance….

        http://www.realinsurance.com.au/car-insurance/pay-as-you-dri…

        One thing to note - you still need to shop around as the low km quote may still not be the best. Have you tried Coles and Woolworths (which has a cash back offer)?

        Few things to be aware of:
        *Increase the excess = lower premium (even a small adjustment online can drop the premium significantly)
        *Market V agreed value - generally better to have the latter so you know up front exactly how much you'll get back in the case of a write-off.
        *Some companies will have a significantly lower agreed value than others, depending on the age and model of the vehicle

        http://www.canstar.com.au/car-insurance/compare-car-insuranc…

        Bottom line: you have to spend a few hours doing online quotes and looking at offers if you want to save $200+ on your premium.

  • welfoj on 04/06/2015 - 08:01

    Something to think about with car insurance is potential losses of the third party other than the vehicle. When I was young and dumb I lost my license and had to go to a safe driver course, one of the things they mentioned was to always have comprehensive insurance regardless of the value of your own car, purely because it will cover income loss etc that may be caused from any accident.

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